How do agencies not only survive – but thrive?
Like Lucy slipping through the wardrobe to Narnia, we entered a flower shop in Covent Garden to find ourselves in The Ivy Club a few minutes later. With Chatham House rules the order of the day, we joined creative businesses for a breakfast roundtable in association with the British Interactive Media Association (BIMA).
Ten of the best and brightest agencies came together to discuss their biggest challenges and burning issues in the creative industries right now. The event was hosted by industry heavy-weight, Justin Cooke, founder of Fortune Cookie, who dons various hats including Chairman of The Drum. He shared his experience of managing an agency through uncertainty and explained how agencies can set themselves up to take advantage during tough times.
With warning signs of slowing business activity due to Brexit uncertainty, something on many agency owner’s minds is growth. How can creative businesses not only survive – but thrive? Here’s a sneak peak of the hot topics that were discussed:
One tactic to consider is reaching out to the best recruiter you know and bringing them in-house. Talented people tend to associate with other talented people so having a great internal referral scheme is essential. Don’t be afraid to ask applicants that turned down a job offer why they decided to go with another agency – look for recurring themes in that feedback. And finally, act quickly when a hire just isn’t working out. You’re less likely to regret parting ways with someone than you are to regret not doing it sooner.
The first step is to narrow down what you’re really good at, find evidence to prove it and then focus on selling that specific thing. Another great way to bring in leads is through partnerships – think of it as adding an extra salesforce that’s motivated to sell your business. There’s also an argument for shifting your focus away from chasing new business and onto developing ongoing relationships with existing clients that provide constant revenue streams.
Our research shows that 43% of invoices issued by creative business with an average value of £26k were paid late in 2019. Though not always easy, in situations like this, prevention is often better than cure. Try asking for 50% payment upfront or requesting minimum monthly payments for the duration of the project. You could also consider including a clause in your contracts that gives you sole intellectual property rights in the case of non-payment.
As the business grows, hire a Finance Director that can take a tough line when there are outstanding invoices that need to be chased. Make sure client-facing teams are also actively looking out for early signs that a client is likely to pay late. Importantly, get the right funding in place to bridge the cash flow gaps created by late payments and lengthy payment terms.
At MarketFinance, we think creatives should be able to get on with growing their business, instead of having to worry about cash flow. That’s why we’re making it quick and easy to get funding. Since 2011, we’ve funded invoices worth over £284 million to creative businesses, spanning ad tech and digital marketing to PR and design.
With invoice finance, our customers can advance funds against their outstanding invoices, accessing that working capital straight away. It’s a simple solution that enables creatives to spend more time doing the things they love.
This article was originally posted in 2019 and updated in 2020.